22 Jan 2019
How big businesses can help solve the issues that bankers and politicians can’t
In Washington, D.C., The Institute for Government held a special event as part of their 'Global Thinkers series', featuring Sir Paul Tucker and Dr Anne-Marie Slaughter - discussing how challenges such as aging populations and technological change is re-shaping the way we work, and how we think.
For many years, the economic and political world has walked hand-in-hand: elected politicians gaining advice and guidance from ‘unelected powers’ including central banks and other heavily regulated authorities. In the UK these unelected powers (senior bankers, Judges and industrialists) are referred to as “The Establishment”, or even "The Elite".
Each major economic and politically influential nation has one, all generally sharing the same outlook and views. Today the landscape is changing as we now experience issues that the technically skilled cannot fix.
Social values, the increasing demand of living standards and expectations are issues that are seen to be the responsibility of government – to improve productivity and increase wealth for societies in the future. In 2008, global financial crisis was unveiled in full view, with technocrats leading the damage control and repair. Institutions such as Lehman Brothers disappeared – along with public trust.
10 years on, the distrust remains and big businesses risk being tarred with the same brush. We’re OK speaking to technocrats; but we worry that politicians add to volatility. Policy makers are not very good at execution; and businesses are poor at policy making.
We notice that technocrats, big businesses and politicians all share the same short-sighted weaknesses – focusing on short-term wins such as opinion polls or share price. This drives poor decisions such as knee-jerk legislation or share buy-backs and lack focus on the long-term. Governments and big businesses are becoming blinkered, as exclusive wealth for the elite increases with next to no focus on the future. This has to change.
The opposite of exclusive wealth is ‘inclusive capitalism’, an attitude that businesses need to adopt. By having an equal emphasis on ‘inclusive’ and ‘capitalism’, we can focus on doing well and doing good in equal measure.
In 1987, fictitious financial pin-up Gordon Gekko famously said ‘greed is good’ - a phrase that very few financial titans would agree with today. Instead, companies like us describe business in terms of purpose.
By encouraging positive and constructive partnerships that take large pools of capital and putting them to work, we can raise the tides of economic growth. Examples of this can be seen where publicly supported, locally committed people (such as Michael Bloomberg in New York, Andy Street in Birmingham and Andy Burnham in Manchester) provide and produce results alongside business.
2019 not only brings challenges, but opportunities too. Those in “The Establishment” should build their purpose around inclusive capitalism – engaging with issues that matter to the man in the street, the next generation and beyond.